Canadian stocks fell the most in 11 months, led by oil and raw material producers, as the U.S. stalemate on raising the debt limit persisted.
Suncor Energy Inc., Canada’s largest oil and gas company, declined 2.7 percent as oil fell after an unexpected increase in U.S. supplies. Barrick Gold Corp., the world’s biggest producer of the metal, dropped 2.1 percent as bullion futures fluctuated after three days of gains. Toronto-Dominion Bank, Canada’s second-largest lender by assets, decreased 2.1 percent as investors including BlackRock Inc. and Franklin Templeton Investments said the U.S. faces losing its top-level debt rating from Standard & Poor’s or Moody’s Investors Service.
The Standard & Poor’s/TSX Composite Index retreated 267.89 points, or 2.0 percent, to 13,032.67 at 4 p.m. in Toronto, the biggest decline since Aug. 11.
“It’s a reflection of the jitteriness we’re seeing,” Laura Wallace, a money manager in the private client division at Scotia Asset Management, said in a telephone interview. Scotia oversees C$10 billion ($10.5 billion). “We don’t have a resolution to the debt and there is concern about what the impact of an S&P downgrade would be.”
The S&P/TSX slipped less than 1 point this month through yesterday as gold producers rose and financial companies dropped while U.S. politicians debated rival plans to raise the country’s debt ceiling. U.S. Treasury Secretary Timothy F. Geithner has said the U.S. will run out of options to prevent a default on Aug. 2. Seventy-five percent of Canadian exports went to the U.S. last year, according to Statistics Canada.
Crude oil lost 2.2 percent in New York after the U.S. Energy Department said inventories increased last week. Eleven of 13 analysts in a Bloomberg survey had forecast a drop in supplies.
Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, fell 2.8 percent to C$39.48. Canadian Oil Sands Ltd., the largest owner of the Syncrude project, declined 3.7 percent to C$26.55. Talisman Energy Inc., which operates in North America, the North Sea and Indonesia, lost 2.3 percent to C$18.75. Suncor declined 2.7 percent to C$38.14. Uranium One Inc., an explorer for the metal, sank 6.8 percent to C$3.43.
The S&P/TSX index that measures utilities fell 1.9 percent, the most since June 2010. Fortis Inc., Canada’s largest publicly traded utility, dropped 2.4 percent, the most since November 2010, to C$31.69. The S&P/TSX index of consumer discretionary stocks declined 2.2 percent, the most since August 2010. Magna International Inc., Canada’s largest auto-parts maker, lost 4.1 percent to C$45.61 for its biggest drop since February.
Gold futures fell 0.2 percent after advancing to a record earlier, while the U.S. Dollar Index rebounded from a two-month low.
Barrick lost 2.1 percent to C$46. Goldcorp Inc., the world’s second-largest producer of the metal by market value, decreased 3.4 percent to C$48.23. Silver Wheaton Corp. fell 4.9 percent to C$35.35. Avalon Rare Metals Inc. tumbled 10 percent to C$5.78 after pricing a $43.7 million offering of stock. Orvana Minerals Corp. slumped 12 percent, the most since March 2009, to $2.06 after saying it plans a $17 million stock offering.
Copper, lead and zinc fell on the London Metal Exchange after the U.S. Commerce Department reported a drop in durable goods orders in June. Teck Resources Ltd., Canada’s biggest base metals producer, lost 4.8 percent to $47.29. Ivanhoe Mines Ltd. slipped 2 percent to C$25.23.
Sino-Forest Corp. rose 8 percent to C$7.69, gaining for a seventh day after New Zealand billionaire Richard Chandler said he raised his stake in the Chinese tree-farm operator to 15 percent to become the largest shareholder.
An index of financial shares in the S&P/TSX declined to a seven-month low. Toronto-Dominion fell 2.1 percent to C$77.00. Royal Bank of Canada dropped 1.4 percent to C$51.33. Bank of Nova Scotia lost 2 percent to C$54.82.
Fertilizer producers slumped along with corn futures after meteorologists forecast rain for the U.S. Midwest. Potash Corp. of Saskatchewan Inc., the world’s largest maker of the crop nutrient by market value, declined 2.3 percent to C$56.28. Rival producer Agrium Inc. lost 1.8 percent to C$84.33.
Research In Motion Ltd., which makes BlackBerry smartphones, dropped 5.6 percent to C$24.37, its lowest price since August 2006, after UBS lowered its price target to $30 from $41, saying that the company is losing ground to competitors.